Why is There Money?

Why is There Money?
Author: Ross M. Starr
Publisher: Edward Elgar Publishing
Total Pages: 177
Release: 2012-01-01
Genre: Business & Economics
ISBN: 0857938061

'This book makes compelling reading for anyone interested in exploring the foundations of monetary theory from a rigorous general equilibrium perspective.' – Gabriele Camera, Purdue University, US 'Introducing the Arrow-Debreu-Starr model of monetary general equilibrium, Professor Starr provides the best defense ever made for the relevance of the Walrasian model to the pure theory of money. While most monetary theorists ventured to the overlapping generations model and then to the search model, only to create recently a hybrid search-Walrasian model, Starr presents the culmination of a patient, career-long effort to integrate money into the basic Walrasian model, with realistic taxation critically helping the government's money to dominate.' – Dror Goldberg, Bar Ilan University, Israel The microeconomic foundation of the theory of money has long represented a puzzle to economic theory. Why is there Money? derives the foundations of monetary theory from advanced price theory in a mathematically precise family of trading post models. It has long been recognized that the fundamental theoretical analysis of a market economy is embodied in the Arrow-Debreu-Walras mathematical general equilibrium model, with one great deficiency: the analysis cannot accommodate money and financial institutions. In this groundbreaking book, Ross M. Starr addresses this problem directly, by expanding the Arrow-Debreu model to include a multiplicity of trading opportunities, with the resultant endogenous derivation of money as the carrier of value among them. This fundamental breakthrough is achieved while maintaining the Walrasian general equilibrium price-theoretic structure, augmented primarily by the introduction of separate bid and ask prices reflecting transaction costs. The result is foundations of monetary theory consistent with and derived from modern price theory. This fascinating book will provide a stimulating and thought-provoking read for academics and postgraduate students focusing on economics, macroeconomics, macroeconomic policy and finance, money and banking. Central bankers will also find much to interest them within this book.

Money

Money
Author: Rudolf Richter
Publisher: Springer Science & Business Media
Total Pages: 407
Release: 2012-12-06
Genre: Business & Economics
ISBN: 3642740375

The central idea of this book is the concept of a currency order. Monetary theory is developed as a theory of currency orders. The book expands the neoclassical theory of currency orders. This new way of looking at the problems permits a general view of the subject matter of monetary theory and policy which so far does not exist. The concept of transaction costs is used throughout. The book deals not only with the theories of the demand for and the supply of money, the banking firm, and the purchasing power of money. It also presents a theoretically based discussion of the great topics of monetary policy of our time: fixed vs. flexible exchange rates, gold vs. paper, rules vs. authority for the central banks, governmental currency monopoly vs. competition of private currencies, regulation vs. deregulation of commercial banks. The book is suitable as a text for students with a knowledge of money and banking and intermediate microeconomics. It offers a consistent and well-written presentation of the subject matter, as well as an extensive list of further readings.

General Equilibrium Models of Monetary Economies

General Equilibrium Models of Monetary Economies
Author: Ross M. Starr
Publisher: Academic Press
Total Pages: 364
Release: 2014-05-10
Genre: Business & Economics
ISBN: 1483273512

General Equilibrium Models of Monetary Economies: Studies in the Static Foundations of Monetary Theory is a collection of essays that addresses the integration of the theory of money and the theory of value by using a mathematical general equilibrium theory. The papers discuss monetary theory, microeconomic theory, bilateral trade, transactions costs, intertemporal allocation, and the value of money. The Arrow-Debreu model of Walrasian general equilibrium theory provides a framework to represent money as a device for facilitating trade among economic agents without the use of money as a medium of exchange and as a store of value. The essays analyze the rationale for using a medium of exchange, for using a store of value, and for holding of idle balances in equilibrium. The essays show that by explicit modeling of the structure and difficulties of trade, a powerful class of models which deny money and finance a role in the economy, has by itself shown to have provided the foundation for the structures of trade. The collection will prove helpful for economists, statistician, mathematicians, students or professors of economics and business.

General Equilibrium Analysis and the Theory of Markets

General Equilibrium Analysis and the Theory of Markets
Author: Manuel Luís Costa
Publisher: Edward Elgar Publishing
Total Pages: 240
Release: 1998
Genre: Business & Economics
ISBN:

This book offers a comprehensive critique of the Walrasian general equilibrium approach and argues that it cannot account for the behaviour of the real economy at a microeconomic level. This book will be of great interest to scholars of the history of economic thought and microeconomic theory.

An Analysis of General Equilibrium with Positive Transaction Costs and Non-Convex Preference

An Analysis of General Equilibrium with Positive Transaction Costs and Non-Convex Preference
Author: Zhiping Xie
Publisher:
Total Pages: 39
Release: 2004
Genre:
ISBN:

After taking into account positive transaction costs via tackling static nonlinear programming with dynamic programming, this paper reaches three main conclusions: 1) The aggregate excess demand function of each market will be discontinuous at many price points, but the transfiguration of the graph of aggregate excess demand of each commodity will be continuous with respect to prices of other commodities, and at those price points incurring discontinuity, the corresponding traders' utility or profit will be indifferent between different choices. 2) Via a new approach able to tackle the discontinuous aggregate excess demand, it is proved that, there must exist a market equilibrium price vector in a perfectly competitive economy with positive transaction costs even if each consumer's preference isn't convex. 3) Transaction cost probably spoils the satisfaction of those two fundamental theorems of welfare economics, as well as it ruins the social aggregate welfare through three approaches.

Firms, Markets and Hierarchies

Firms, Markets and Hierarchies
Author: Glenn R. Carroll
Publisher: Oxford University Press
Total Pages: 561
Release: 1999-01-28
Genre: Business & Economics
ISBN: 0195353196

This book examines transaction cost economics, the influential theoretical perspective on organizations and industry that was the subject of Oliver Williamson's seminal book,Markets and Hierarchies (1975). Written by leading economists, sociologists, and political scientists, the essays collected here reflect the fruitful intellectual exchange that is occurring across the major social science disciplines. They examine transaction cost economics' general conceptual orientation, its specific theoretical propositions, its applications to policy, and its use in systematic empirical research. The chapters include classic texts, broad review essays, reflective commentaries, and several new contributions to a wide range of topics, including organizations, regulations and law, institutions, strategic management, game theory, entrepreneurship, innovation, finance, and technical information. The book begins with an overview of theory and research on transaction cost economics, highlighting the specific accomplishments of scholars working within the perspective and emphasizing the enormous influence that transaction cost reasoning exerts on the social sciences. The following section covers conceptual uses for the transaction cost framework and major theoretical or methodological elements within it, such as bounded rationality. While advancing some interesting theoretical propositions, these chapters are in fact more ambitious: each examines a specific field, area, or research program and attempts to fashion a new way of thinking about research questions. In the section on industrial applications, contributors study the application of transaction cost theory to a range of problems in utilities, telecommunications, laser printing, and early international trade. The book closes with four microanalytical chapters that delve into the structures and behaviors of specific aspects of firms and organizations: boards of directors, equity structures, employment models, human resource policies and practices, technology strategies, and innovation events. Firms, Markets, and Hierarchies collects excellent social science work on transaction cost economics, taking stock of its status, charting its future development, and fostering its renewal and evolution.